April 2013

Is the RFP Process Broken?

the number of hotels on the RFP increase, the time/standard increases to allow for research and proposal generation.”

‘Customers feel that if they source more hotels, it will improve their RFP response rate. This practice can sometimes actually delay response times.’ -Dave Nostrand

That helps, but it doesn't mitigate the problem completely. And it doesn't get at another complaint about eRFPs: They reduce or eliminate human interaction from the sales process. “I consider myself kind of an old-school planner,” Schultz said. “I've been doing this for 17 years. Back when I started there [were many] more one-on-one relationships with your hotel venue or with your national sales manager who oversaw your project.” For planners who have never known life without eRFPs and weren't trained in the tradition of calling up a sales contact, “I don't think you would think that that's an option, because we're so ‘this is how you do the RFP, and you do it through the computer and you send it in online.’ And what we're seeing is a loss of the interrelationships.”

That's the experience of some meeting professionals on the other side of the table as well. “The constant comment I get from salespeople is, ‘This electronic RFP system — the problem is it's making it transactional. It's taking away our ability to get to meet the customer,'” Dominguez said. “When I hear that, I call everybody on it. I say, ‘Look, if you're waiting to build a relationship till when you got the lead, you're too late.’

“This is my problem. I think people make it become the crutch to say, ‘They're keeping me from my customers.’ No, that is not quite accurate, because in my experience with StarCite and Cvent, they will get me to my end user. They will tell me which customers are using my hotels. I can build relationships with them.”

While acknowledging that the online-RFP process is not without flaws, providers such as Elite Meetings and Cvent stress that they've built human contact into their systems. Elite has an in-platform messaging system, for example, that allows planners and salespeople to communicate directly. Beyond that, “We provide all of the contact information [for each venue] to the planner,” Elite's Foy said. “It's up to the planner to indicate to the hotel in our system how they want to be contacted.… This is all about the face-to-face, and our whole mantra is, let's introduce the right buyer to the right supplier and let's get the heck out of the way.”

Cvent likewise incorporates a variety of touch points into its platform, including client-services assistance for meeting professionals navigating the process, as well as built-in “metrics and measures” designed to educate product users. “We don't feel comfortable being in the position to tell a planner or a hotel what they should respond to, how many venues you should send it to,” Malhotra said, “because we are a technology that has been built to get [someone] to use hopefully in the most appropriate way possible.”

In other words, you have to let people figure out if and when they need to talk to one another — which is how Sharon Collins, CMP, SMMC, strategic meeting partner for the American Cancer Society, prefers to operate. “We find that when we get to our short list [of venues after sending out an eRFP],” Collins said, “… it's then that we're reaching out to say, ‘Okay, do you have flexibility on this,’ or ‘Tell me what space you have secured for our event,’ and then we'll do a space analysis.… We really get down to brass tacks with that interaction, whether it be an email, phone call, [or] involvement of an NSO.”

There's Always Room for Improvement

Like Hyatt's Vonderheide said, the meetings and hospitality industry is aware there's a problem, and has convened any number of discussions about RFP spam — formally and informally — at industry conferences. And professionals on every side of the table have some thoughts about how the RFP process could be improved:

1. eRFPs need to be more nuanced. Schultz generally creates and distributes her own RFPs, partly because she can customize them for each individual meeting. “I look at it from a planner's perspective,” Schultz said, “and … when we have to work within the technological system that is provided, we have struggled with being able to customize it. We feel as planners that all of our programs are unique and different, and I think on the hotel side they look at it as [so many] heads. It does lose that personal touch through a computer agency, because it does standardize it and it makes it a little bit more difficult to be very specific on what you need.”

RFP providers would agree that better-targeted information is always beneficial, and over the last year or two have taken steps to refine their platforms, both allowing planners to more precisely hone their RFPs and limiting the number of venues they can submit it to. When a planner using Elite's platform selects seven hotels to submit an RFP, Foy said, a message pops up “that basically warns, ‘You don't want to send this to more than seven hotels. Please don't.'”

Likewise, Collins appreciates that her RFP provider — StarCite — allows her to add customized specifications and cover letters for each bid. “We [ask] for the American Cancer Society, what percentage of your hotel is smoke-free?” Collins said. “Because that's a consideration for us. So you can customize those questions so that you're ensuring that you're getting the most back to do that first round of elimination for hotels that have space available.”

Dominguez thinks it might also be helpful to have a preliminary step in advance or in lieu of a full-fledged RFP — an RFI (request for information). “If you are looking at three different destinations and a whole bunch of hotels,” he said, “candidly, what you need to know is that I can handle your meeting. Do I really need to tell you at that point which ballroom I'm going to put you in if you haven't even decided which city you'll be in?”

2. Planners need to be more disciplined. Just like when you have a hammer, everything looks like a nail — when you're sending out an eRFP, every venue looks like a potential fit, because it takes no more effort to reach a hundred venues than it does to reach one. “There are planners that have been abusive of this system, and we have shut them down because we don't believe in their logic,” Malhotra said. “They will send [an RFP] to a five-star hotel and a local motel for the same piece of business. That does not make sense, so we'll give them warnings and we have no qualms about telling planners that we are going to shut you down and disable access to the system.”

‘Do I really need to tell you which ballroom I'm going to put you in if you haven't even decided which city you'll be in?’ -Michael Dominguez

This is where it's on planners to think seriously about their meeting before distributing their RFP. “If there is any opportunity for [planners] to narrow their search down to either a destination or a brand or a type of hotel prior to pushing the button,” Vonderheide said, “it certainly is appreciated by the hotels. It allows us to concentrate and jump on the business that is most relevant to us and not lose one of their very important meetings in the minutiae of leads that may or may not be relevant for your hotel.” Added Foy: “Two or three minutes of extra work will save hours on the back end. To me, that's just the bare-bones basics, but a lot of people overlook it because these systems make it so